This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Buy Apple Before Next Buyback Blasts It to $800

Apple is in the midst of a $60-billion buyback that it recently extended through 2015. But in February, Cook said Apple has repurchased more than $40 billion shares in the last 12 months. During that span, the stock has soared 41%. My scorecard says Apple has $20 billion more shares to buy, and has less than a year to do it.

A couple of months ago, Cook felt the need to accelerate Apple's existing buyback plan, while showing no fear about buying on the open market. I have not had any conversations with him. But investors should expect continued aggressiveness from Cook in the next 30 days, which should drive Apple shares higher.

It's not just about accelerating the buyback plan. I expect Apple to raise the dividend and double the buyback program to $120 billion. With $160 billion on the balance sheet and $53 billion in operating cash flow, financing will be no issue. With the cash earning next-to-nothing on the sidelines, Cook has no choice but to place the bet on his own company.

Assuming the dividend (currently 2.3%) is raised by 1%, Apple will immediately be seen as shareholder friendly. Institutions will return like bees to honey. It wouldn't be beyond the realm of possibility for Apple's stock to then appreciate 50% in the next twelve months.

From current levels, this projects fair value right around $800 a share, to say nothing about potential revenue growth from China Mobile's (CHL) 770 million subscribers. Apple has yet to quantify the impact of China Mobile sales for one full quarter. We will find out soon enough.

As it stands, Apple's stock seems the surest of sure things.

At the time of publication, the author was long AAPL and held no position in any of the stocks mentioned.

This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.

2 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
AAPL $118.05 -0.70%
FB $105.39 -0.33%
GOOG $748.82 0.07%
TSLA $229.71 5.30%
YHOO $33.16 0.62%


Chart of I:DJI
DOW 17,813.39 +1.20 0.01%
S&P 500 2,088.87 -0.27 -0.01%
NASDAQ 5,116.1430 +13.3350 0.26%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs